Why your loan application was denied and what to do about it
If you’ve recently applied for a loan or credit card and were surprised to find that your request was denied, we’re going to help you find out why and make sure you make the right decision on what to do next.
Are you stressing about your debt or the fact that you think you cannot get a loan because you don't have good credit? What if we were to tell you that yes, you can apply for a loan and yes, it is as easy as choosing the right lender for your needs?
Whether you have bad credit or no credit at all, you can improve your credit score and later make applying for a loan easier. You can not only ensure approval by improving your credit score but also access better rates and loan terms.
How to build up your credit score to get a loan
One issue preventing you from obtaining a loan may be that you have not yet built your credit score or you do not have any accounts that you pay monthly and thus have no credit report or score at all.
In order to apply for a loan or any account, you need to spend money and pay it back to build up a credit history. That is why if you are struggling to get a phone contract, some might suggest getting a clothing account because as you pay the account off, it will start reflecting on your credit file.
If you have a bad credit score you will need to stop applying for credit and maintain all of your loan repayments over an extended period of time to improve your rating.
Tip: Did you know that you get sites where you can go and check your credit score and this will help you to know what type of loan you can apply for?
It can also tell you whether your credit score is low based on what your credit rating looks like. It also gives you all the information you need, if you are thinking about applying for a loan.
You are entitled to a copy of your credit file for free once a year. To ensure you know why you have a poor credit score, request this free copy of your credit file and review it.
Can you get a loan with a low credit score?
If your credit score is below a certain figure, then you have low credit and it will be harder to get approval on personal loans, credit cards and other financial products.
But it is not impossible and that is what we would like you to know, that you can apply for a loan and your application can be approved. All you have to do is apply for a bad credit loan and ensure you stick to your loan repayments.
To access credit with a bad credit score you may need to provide security or apply for a guarantor loan. This will help you secure a larger loan amount and a lower interest rate to make your loan more affordable. Before you know it, you will have an improved credit rating and a positive credit positive.
Loan options for those struggling with debt
Debt consolidation loans to better manage debt
You can apply for a loan for the purpose of consolidating all your debt into a single personal loan. It is an effective debt control method and can help you increase your monthly disposable income.
You will then be responsible for one debt repayment monthly. Debt consolidation might also help you save money on interest paid to various different lenders but will likely lower your credit score as many open accounts will be closed simultaneously.
Debt counselling for more severe debt problems
Debt counselling on the other hand is a different story. This is where a company will help you get out of debt by consulting with your lenders and asking them to release you from your loan contract by allowing the debt counsellors to pay off your debt.
Getting to know bad credit loans a little better
Did you know that bad credit loan interest rates are higher than rates on normal loans? The reason for this is that you are seen as a higher risk. But should you stick to your repayments you will not be seen as high risk anymore and will improve your credit score.
The faster you pay back your loan, the less interest you will pay since the interest will no longer be charged for the full loan term. The only thing to bear in mind is that you should always check to see if there are any early repayment penalties or loan settlement fees.
Reap the rewards of repaying your loan on time
Paying for your loan on time will help you build the credit that you will need to never need to take out a bad credit loan again. Once you successfully pay off your loan you will have raised your credit score and will be eligible for a regular personal loan with a better interest rate.
You do not have to lose hope as there is always more than one way to get the loan you need, whether you have a low credit score or you have existing debt, you can always get a loan.
You will always know which company is for you when it comes to your loan
If you have questions or would like to submit your application online, you should make sure that you do this before submitting. Applying for an online loan is easy and saves you time, especially in cash emergency situations.
Always arm yourself with as much information as possible prior to taking out a bad credit loan and always review the terms and conditions as closely as possible.
An important step to take before applying for a loan is to use a loan comparison site and find the right loan and lender for you. You should, in addition to the interest rates, also consider initiation and maintenance fees as well as loan amounts and loan terms and conditions.